Dear Apple: Get Back to Work

Focusing on the wrong things, while fundamentals slide.

You’ve no doubt heard by now that Apple came up short of expectations. Realistically, it isn’t as big of a deal as analysts and investors are making it out to be. But the iconic innovator has bigger problems than iPhone sales. It’s too busy being king of the mountain, while forgetting what got it there in the first place.

Throwing sand in competitors’ eyes

Apple(Nasdaq: AAPL) is really pissed. One of its biggest rivals recently took over as number one smart phone purveyor.

How could they do that?! The nerve of those people!

"Those people" is Samsung (OTC: SSNLF.PK). I understand the need to stay competitive, but Apple needs to keep in mind why it was so successful in the first place, instead of tying Samsung’s shoelaces together when it isn’t looking.

In what could be the most middle-school way ever of admitting defeat, Apple said that Samsung cheated its way to becoming the biggest smart phone company by volume. Really, Apple? They cheated their way there? What’s next … did Samsung copy your science project, too?

Oh wait, that’s exactly what Apple claims.

Apple invented a geometric shape

According to Tim Cook’s legion of lawyers, Samsung copied the design of the iPhone and iPad in creating its own devices.

Without getting too caught up in a theoretical discussion, I’d like to lay Apple’s claim to rest.

As tablets and smart phones rose to the top of consumer electronic greatness, it was a race to see who could make the best, most well-designed product first. I think Apple won that game hands down, but that doesn’t mean they own the concepts. Ergonomically, smart phones and tablets need to be rectangular. Circles just don’t make sense. We need to be able to hold a smart phone with one hand, because it’s still a phone, and needs to be convenient.

Basically, Apple is arguing that Samsung stole its novel idea of a rectangle. If you can prove in court that you invented the rectangle, Apple, then I think you deserve global supremacy. But, as the Bay-area court will likely realize, it’s a tough argument to claim rights over geometry.

In that case, maybe Greek philosopher and mathematician Euclid should be suing you for stealing his material. I hear he needs the cash.

Everyone is guilty

Samsung has counter claims against Apple, citing a bunch of patent mumbo jumbo, and that Apple wouldn’t have sold one iPhone without Samsung.

Let’s get something straight here: You all copied each other, so shut up. There's no single company that came up with every bit of technology available on the market today. It just didn’t happen. We all know that Al Gore invented the Internet, anyway. So instead of pointing fingers at each other, just keep making great stuff, and sell it to us -- we will buy all of it, I promise.

Get back to work

I doubt that the lawyers you hired are working pro bono, unless that means that they listen to U2. With the $110 billion in cash that you’re making into paper airplanes and flying over to law firms, why don’t you, instead, let Samsung enjoy its holiday in the sun, and get back to business. You’re the most innovative company on the planet, Apple. I have a hard time believing there's nothing better to do with your money than send the families of Morrison and Foerster LLP to Cabo.

And Samsung, the same goes for you. You guys make every TV ever, so why are you squabbling about patents? I really need a 65” LCD for $100, so please figure out how to make that happen.

These companies are suffering from seriously dumb cases of a God-complex. And, in the meantime, sales are down, and Wall Street analysts are angry.

Apple, get out of the courtroom, and go back to your underground lair full of PhDs. They’re getting hungry.

You’re wasting our time and our money.

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Author

Michael is a value-oriented investment analyst with a specific interest in retail and media businesses. Before coming to the Fool, Michael worked with private investment funds focusing on deep value and special situations. Currently living in the media capital of the world--Los Angeles, California.